Understanding Your Risk Profile

Risk Profile?

One of the crucial aspects of successful investing is understanding your risk profile.

How willing are you to accept fluctuations in the value of your investments?




If you choose a ‘balanced’ profile, it generally means you are willing to take a moderate amount of risk with your investments and probably have a combination of higher risk investments, such as shares, together with lower risk investments, like Government bonds.

The problem with risk profiling is that an investor’s risk tolerance is dynamic. Interestingly, in a bull market, when asset valuations tend to be higher, investors are often more willing to take on a higher level of risk. In a bear market, however, when valuations tend to be lower and therefore asset prices less expensive, investors tend to be more risk averse.

In essence, our risk tolerance tends to increase at the exact time we should be scrutinising our portfolios the most!

So, how do we get away from this way of thinking? One way is to set a savings goal and only take as much risk as is needed to reach your target. Even as markets move up and down, the overall level of risk will remain the same. That way, you are not tempted to stretch your risk tolerance just because markets are strong.

Another way to look at your risk profile is to look at age-based risk profiling. Investors in the accumulation phase might be more willing to take on a higher degree of risk in their portfolios because of their stage in life.

Generally, these investors will have a longer investment time horizon and/or earnings capacity, allowing for more time to ride out the volatility in markets.

As an investor gets closer to retirement and looks to start drawing down their accumulated funds, their risk profile is likely to become a little more conservative, simply because losses at this later stage of life are harder to recoup as there is less time available.

In the retirement phase, an investor can use an appropriate combination of both of these strategies. With an ageing population, people are now living longer. To meet their expected lifespan, investors need to manage their accumulated pool of savings by targeting a certain level of earnings. What does this mean?

For a risk adverse investor, who avoids shares and other more volatile investments, the biggest risk is that their savings run out before they do!

Investors, therefore, may need to consider holding a portion of higher risk investments in order to meet their overall retirement needs; being mindful, however, to limit that exposure to manage any market volatility.

Whatever your stage of life, it’s important to discuss these issues with your financial adviser to make sure your investment strategy reflects a risk profile that’s appropriate for your situation.


Making the best of redundancy



Making the best of redundancy

Have you been made redundant or suspect it may happen? You could be faced with new emotional and financial issues that you need to make informed decisions about. It’s not an easy thing to sort through but the following information provides a quick overview of some things to consider


Being ‘retrenched’ is a shock. You could be in a state of disbelief, acceptance or happy at the thought of a payout. It may sound ridiculous, but redundancy could provide you with the money and the opportunity to change direction. The key is to emotionally and financially handle the transition. Generally, a redundancy payment is where:

• You are required to leave your job because your role is no longer needed or no longer required in a certain location

•You are under age 65 at the time of receipt of the payment

•There is no arrangement for future employment made on \ your behalf or by your employer

•The amount paid must not exceed an amount for a dismissal that is reasonable ‘on an arm’s length basis

If the conditions above are satisfied, then you may be entitled to a tax free amount.

In the 2012-13 financial year, the tax-free amount of a genuine redundancy payout is defined as the first $8,806 received plus $4,404 for every year of completed service. Any redundancy payments exceeding this are described as an ‘employment termination payment’ (ETP) and are subject to different tax rates when cashed out. You can only take your ETP amount in cash.


It’s important to have someone check your employer’s calculations to ensure that you are being paid the correct amount. Make sure all your relevant years of service have been included and that the payment is consistent with your company’s stated redundancy policy or your contract. You should speak to your financial adviser as early as possible to make sure you are receiving all the benefits you are entitled to.


It’s tempting to view a redundancy payout as an opportunity to have a holiday or pay off some debts. Before doing that you need to make sure that you can cover your living expenses for the next few months until you find a new job. If you have large debts, and you do want to reduce them, make sure you pay off the most costly ones first.


If your home loan provider offers a mortgage offset account, this can be an excellent way of reducing your loan interest payments while still being able to access the money. Even if you are an aggressive investor by nature, using the proceeds to have a flutter on the share market can be a risky move.

Before making any changes, you should speak to your financial adviser to ensure you get the best outcome for you.

lost my super

Lost super

lost my super

lost my super

There is over $17 billion of lost superannuation and more than $677 million in old bank, credit union or building society accounts, shares and life insurance policies waiting to be found.

Lost shares, bank accounts and life insurance

Australian Securites & Investments Commission (ASIC) https://www.moneysmart.gov.au/tools-and-resources/find-unclaimed-money/unclaimed-money-search

has an Unclaimed Money Search tool.  If you have every moved address often, moved overseas, or simply forgotten, you could have unclaimed money.

There is unclaimed money in:

■  Bank accounts – $330 million

■  Shares – $295 million

■  Life insurance – $52 million


It has now been 20 years since compulsory Superannuation Guarantee superannuation contributions commenced on 1 July 2002. 

If you have ever changed your job, moved address often, moved overseas, and/or changed your surname then you could have lost superannuation.

Your superannuation could either be:

In a Superannuation Fund

 You may need to work out which superannuation fund each of your old employers paid into & then contact each of those superannuation funds.  If you cannot remember the names of your old employers, your group certificates are a good place to start.

 In an Eligible Rollover Fund (ERF)

If a superannuation fund is unable to contact you, as they do not have a current address (they have received returned mail) or a contribution has not been received after a certain period of time, a super fund may roll your super to an ERF. 

An ERF has no investment options (your money will be invested in a default option),  usually has no insurance and can only accept limited types of contributions (they cannot accept regular SG contributions from an employer). 

Transferred to the Australian Taxation Office – Unclaimed Monies

ATO-held super includes amounts paid to the ATO by employers, super funds (if they cannot contact you) or if the ATO have been unable to find an account to transfer the money to, the ATO will hold it for you.

Previously amounts less than $200 were sent to the ATO.  From January 2013 the threshold will be amounts less than $2,000.

Superseeker – This is the ATO’s database which holds information about lost and unclaimed super held by all super funds in Australia (updated 6 monthly) and by the ATO.

You can either do a quick search using your name, date of birth and tax file number or register for Superseeker https://onlineservices.ato.gov.au/Default.aspx?PageName=YourSuper to:

  • Check your current super accounts that money has been paid into in the last two financial years
  • Find lost super
  • Find ATO held super
  • Transfer your super to the super account you want

Once you have registered online for Superseeker, you can access your super information any time.

What should you consider before transferring super?

Putting your entire super into one account means you will only pay one set of account fees and charges. It also makes it easier to keep track of your super.

However, there are some important factors to consider before transferring your super:

  • Differences in the fees can make a big difference to what you will have to retire on – for example, a 1% increase in fees can significantly reduce your final benefit.
  • The fund you want to leave could add administrative fees, and exit or withdrawal fees.
  • The fund you want to transfer to may charge entry or deposit fees.
  • The fund you want to leave may insure you against death, illness or an accident which leaves you unable to return to work and if you leave this fund, you may lose these insurance entitlements – check if the other fund offers comparable cover.
  • The fund you want to transfer to may not accept transfers of ATO-held or super fund-held money – check before starting your transfer.

If you are unsure what to do, you should seek financial advice or contact your super fund.


There are no fees or charges for transferring ATO-held super money into a super fund account.


And lastly

 State & Territory bodies for unclaimed monies

  1. They may hold unclaimed super from private sector super funds where the super became ‘unclaimed’ before 1 July 2007.

For example, the SA Department of Treasury and Finance will receive unclaimed superannuation only when the member is at the eligibility age of 65 or deceased, the head office of the superannuation company is registered in South Australia and the Superannuation Company cannot locate the member.

If you are not at the eligibility age of 65 you will need to do a search on the ATO’s Superseeker  or telephone the ATO on 13 10 20 or alternatively contact the superannuation fund itself.

  1. Unclaimed monies from companies based on the State or Territory the company was located in. This may be different to the State or Territory you live in.   Companies must hold the money for six years then advertise in the SA Government Gazette for two prior to sending the money to DTF.  Therefore a company must hold unclaimed amounts for eight years and pay Treasury on the ninth year

Department of Treasury and Finance can hold unclaimed:

  • ·dividends (not company shares)
  • ·deceased estates
  • ·liquidation disbursements
  • ·interest
  • ·unpresented/void/stale cheques
  • ·wages/salaries
  • ·trust accounts
  • ·refunds
  • ·unclaimed money from other government departments/agencies prior to 1 February 1998 (after this date each department/agency administers its own unclaimed money register)
  • ·bank account money prior to 1989
  • ·insurance policies prior to 1992

You will need to contact each of the state and territory bodies.  If you search on the Victorian State Revenue Office, you are able to search all states.


Contact details for state and territory bodies




NSW Office of State Revenue -Unclaimed Money www.osr.nsw.gov.au
VIC State Revenue Office www.sro.vic.gov.au
QLD Public Trustee of Queensland www.pt.qld.gov.au
SA Unclaimed Monies – Department of Treasury and Finance www.treasury.sa.gov.au
ACT The Public Trustee for the ACT www.publictrustee.act.gov.au
TAS Department of Treasury and Finance www.treasury.tas.gov.au
NT Territory Revenue Office www.revenue.nt.gov.au
WA Unclaimed Monies – Department of Treasury and Finance www.money.dtf.wa.gov.au

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mining for insurance


mining for insurance

It has been difficult for some mining occupations to access life insurance in the past. But times are changing.

There are a number of reasons why working in the mining industry is very different to many other occupations.

In addition to working in a fast-paced, high-pressure environment, mining workers are often forced to live a long way from their loved ones. This is one of the reasons miners don’t always stay in the industry all their careers.

Compared to many other occupations, mining can also be dangerous. Whether working above or below ground, mining workers are often exposed to risks associated with heavy machinery, vehicles and working with explosives.

Despite improvements in workplace safety over the last decade, the mining industry still had 2,555 serious workers compensation claims in 2009/10.

Mining is also one of the riskiest industries in terms of fatalities, with an average of 3.5 deaths per 100,000 workers in 2009/10. That’s almost double the national average of 1.92.

Combine these threats with the risks everyone faces in their day-to-day lives – like cancer and heart disease – and it makes sense for miners to have a contingency plan for sickness or injury.

Life insurance considerations for miners

Traditionally, miners have found it difficult to access life insurance on standard terms. However, there are now insurers who offer affordable protection to many mining occupations.

The most common types of life insurance are:

Life cover pays a lump sum if you die or are diagnosed with a terminal illness. The lump sum can be used to meet final expenses, pay off the family mortgage so that your family isn’t left without a home, fund future child education fees and set aside money to meet your family’s ongoing living needs.

Income protection cover pays up to 80% of your income if you can’t work because of sickness or injury. This money is essential in helping to meet your ongoing living needs, including meeting your mortgage repayments, while you are unable to work.

TPD cover pays a lump sum if you are totally and permanently disabled. This may help you repay debts and medical bills, make modifications to your home and motor vehicle, as well as meet lifetime living costs.

Trauma cover pays a lump sum if you are seriously injured in an accident, or if you are diagnosed with one of a number of serious medical conditions, like cancer and heart attack. The proceeds can be used to meet medical treatment costs as well as provide financial support if your spouse wishes to take time off work to look after you.

In addition, miners should look for insurance policies that provide additional protection for accidents and that recognise the true extent of your earning potential – helping you protect the rewards of your hard work.

With so many different types of life insurance available, it’s important to discuss your own life insurance needs with your financial adviser



Leave a lasting legacy


Your will. Your Legacy

We all like to think we’ll leave a lasting legacy. But without a valid will, there’s a good chance your most memorable legacy could be a costly court battle over your estate. Dying without a professionally drafted, up-to-date Will opens the door to the confusing and often expensive world of intestacy.

It’s a world in which lawyers could be the key beneficiaries while family, friends and even business associates are left emotionally and financially drained.

A valid Will specifies how you would like your personal assets (or ‘estate’) distributed following your death. It works in concert with the rest of your estate plans, which can be used to make provisions for children – as well as yourself while you are alive, through various powers of attorney and guardianship.

Despite the importance of a Will, it’s estimated that around 45 per cent of Australians don’t have one. Among those that do, many could find their Will doesn’t meet strict legal requirements, effectively leaving loved ones no better placed than if there was no Will at all.

Having a watertight Will plays a vital role in wealth management. Yes, there is a cost involved in having your Will written by a skilled legal representative. But this could be a tiny fraction of the costs racked up by loved ones if they have to fend off unexpected claims on your estate.

Knowing that your final wishes are set in cement can bring priceless peace of mind to those who matter in your life.